Power Price Adjustment and Inflation——An Empirical Study Based on Input-output Price Model

China is confronted with great inflationary pressure in 2011,with its annual consumer price index(CPI) nearly exceeding 5%.To relieve this pressure,the government did not make rational adjustment to the power price,which further aggravated the power supply in this year.This paper supposes that the lack of reasonable power price adjustment by the government to alleviate inflation pressure may account for this shortage.Thereby,we make use of I-O price model to estimate the correlation between the power price and general price level.The conclusion shows that 10% increase of power price would push up CPI by 0.244%-0.762%.Thus we assume that small-scale increase of power price will not deteriorate the current inflation situation.Moreover,we also study on the correlation between the coal price and the power price,and suggest that the optimal adjustment of power price ranges from 1.05% to 1.8% in response to 10% increase of coal price.